Cash Balance Plans

Cash Balance Plans (CBPs) are a special kind of Defined Benefit Plan. In short, you get all the benefits of a Defined Benefit Plan or 412(e)3 Defined Benefit Plan, except with CBPs, you have much more flexibility (traditional DB and 412(e)3 plans can be somewhat inflexible and difficult to understand).

In a CBP, each participant has an account that resembles those in a 401(k) or profit-sharing plan. To many, a CBP participant account reminds them of a passbook savings account.

The reason you may not have heard about CBPs is that, until the Pension Protection Act (PPA) of 2006, CBPs were not used. However, after the PPA, these plans are the plan of choice by clients who are familiar with them.

Unfortunately, that’s part of the problem. Most advisors do not know how the PPA has opened up new doors when it comes to implementing legally discriminatory CBPs.  Our firm is extremely familiar with the unique benefits of CBPs and we welcome the opportunity to help you learn about them so you can determine if a plan is right for your particular situation.

To learn more about the benefits of CBPs by view/listening to a PowerPoint presentation below.